Calculate the cost of equity capital using CAPM if the risk-free rate of interest is 4 per cent, the return on the market portfolio is 10 per cent,...
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Calculate the cost of equity capital using CAPM if the risk-free rate of interest

is 4 per cent, the return on the market portfolio is 10 per cent, the beta of the firm's assets is .8 and the and beta of equity is 1.2. Provide your answer as a percentage to two decimal places (15.32% should be entered as 15.32).

Top Answer

Expected Return/Cost of Capital of a stock as per Capital Asset Pricing Model (CAPM) = R f + Beta * (R m... View the full answer

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